The classic Gambler’s Ruin puzzle has an actuarial parallel: “Ruin Theory,” the calculations that govern what an insurance company should charge in premiums to reduce the probability of “ruin” for a given insurance line. “Ruin” means encountering claims that exhaust initial reserves plus accumulated premiums. The process can be depicted as a time plot, whereContinue reading “Word of the Week – Ruin Theory”
Daily Archives: March 4, 2021
Puzzle – Gambler’s Ruin
Which is better – wealth or ability? Fred Mosteller posed this question in his classic 1965 small compendium Fifty Challenging Problems in Probability, in the context of the Gambler’s Ruin puzzle. Two players, M and N, engage in a game in which $1 is transferred from one player to the other at each play. PlayerContinue reading “Puzzle – Gambler’s Ruin”
As an Aspiring Data Scientist, What Do I Really Need to Know About Statistics?
As the popularity of data science has grown, so too has advice on how to get jobs in data science. A common form of advice is a list of sample questions you might be asked at your job interview (see here and here for examples). Often, the list starts out with statistics, but beware: itContinue reading “As an Aspiring Data Scientist, What Do I Really Need to Know About Statistics?”